Opinionista• Johann Redelinghuys • 4 February 2013

The heavy hand of government is everywhere

It stifles and diverts business leaders. It bullies the very people on whom it depends to generate the country’s prosperity. Its actions stem from a fundamental misunderstanding of the role of government in relation to that of business and industry.

Government, being a consumer of resources, spends money and does not make money. Its functionaries are paid by the taxes levied on the people who do create the wealth and who are the producers of goods and services. In its own interest it ought to work collaboratively with business, creating the most productive environment for business to do its job. Prosperity comes when government stays in the background and enables the people who can really make a difference to poverty and unemployment to operate unencumbered.

Events in the past few weeks show compelling evidence that our government does not understand its role in this regard and that it sees itself as the ultimate regulator and authority to which business must kowtow. It sees business as the handmaiden of politics. Shouldn’t it be the other way around? Gwede Mantashe, the imperious secretary general of the ANC, speaking at the national executive committee lekgotla, has the gall to hit out at business for being “reluctant” to participate to his satisfaction in creating jobs!

Business leaders must now go down on bended knee to seek the favour of ministers and government. Is that how it is meant to be? Not unless there is a fundamental misconception of the relationship between the two. Government, if it genuinely wants to address its major problems of poverty and unemployment must seek the favour of business and encourage the best possible relationships with business leaders. How can it treat them like schoolboys being summoned to the headmaster’s office? And then to address them as if they are being taught a lesson.

And then when the ANC senses any threat to this misguided authority it becomes menacing and threatens to withdraw “privileges”. Let FNB and Amplats tell you all about it.

The job of a chief executive of a company like FNB or Amplats is to manage the interests of all stakeholders, but most particularly to make a profit for its shareholders. It is not to do the bidding of a political party and it most certainly is not to be constrained, in this freedom-of-speech and democratic country, from making critical comments about the government; even if it is out of the mouths of children.

Thomas Jefferson, former president of the United States and author of The Declaration of Independence said: “The purpose of government is to enable the people of a nation to live in safety and happiness. Government exists for the interests of the governed and not for the governors”. I will let you decide to what extent our present government has achieved this mandate.

Jefferson, who was such a wise and inspired leader, also said “When the people fear the government there is tyranny, when the government fears the people there is liberty.”

While we may not fear the government, we certainly have to pay attention to its dictates. Lionel October, the Trade and Industry director-general, last week told Parliament that black economic empowerment (BEE) is a “voluntary programme, and no company is forced to implement the government’s BEE policy.” This rather disingenuous observation shows how out of touch they are. Does he have any idea how punitive the government is by excluding businesses that don’t have a good BEE score and how state contracts and tenders are wholly dependent on how companies adhere, strictly, to the BEE policy? The government is, in fact, planning new legislation to “enforce compliance” of the BEE’s already tough requirements.

Goodness knows how we got to this sorry state, where the government and its ministers now claim for themselves not only power and influence but lives of luxury and indulgence, while the people they are meant to be serving are faced with ever increasing poverty and unemployment.

Should civil servants, who, after all, are there to serve the people, fly first class wherever they go and always stay in five star accommodation? Should they have a free hand to squander vast sums on the “up-grading” of perfectly decent government residences? Has becoming a civil servant now become the ultimate ego trip?

The extraordinary thing is that, despite our wry observations about the economic and financial illiteracy of key government decision-makers, they seem also to be closet entrepreneurs. They sell and do business with the only resource they have at their disposal: influence. How else to explain a Louboutin-shoe-fetish minister creating favour worth R6 million for her conference- organising boyfriend? And spare a thought for the now-homeless Julius Malema who, before his welcome demise, was accorded the status and adulation of a rock star for handing out tender privileges to his mates. Watch him. His entrepreneurial instincts will help him to recover and survive.

Think back to a chief of police who had extravagant tastes for French and Italian brand-names and who happily sold his influence to canny exploiters of his position.They shout and beat their chests against business for not doing their will, but covertly enjoy the indulgence and luxury of its sponsorship. One longs to see, somewhere, the radiating integrity of a government employee-statesman like Barack Obama.

We, the people, are to blame for letting them get away with it. It is a great pity and an embarrassment that Sizwe Nxasana, CEO of First Rand, rolled over and compounded the submission of business to the will of government by apologising and pulling the “regrettable” video clip showing children critical of the government.

Better to listen to a man like Sipho Nkosi ,CEO of the widely respected Exxaro, who says that mining must stand up to government. He is outspoken and critical of the threats made by Mining Minister Susan Shabangu in her aggressive response to Anglo Platinum’s proposal to close shafts and retrench workers. He, at least, has his eye on the international investors and their likely withdrawal of foreign direct investment from South Africa when they take note of such a threatening stance.

In his post-Davos glow, Mr Zuma has now, flushed with the goodwill and international brotherliness that these events tend to generate accepted an invitation from business to “discuss the government’s relationship with business”. What could come of it? Don’t expect anything more than another talk shop and contrived willingness to appear agreeable. But will it change the behaviour? Will it influence in any way the self-serving values,rapidly becoming entrenched, of a bloated administration?

You tell me. DM

Johann Redelinghuys

Johann Redelinghuys is a partner at Heidrick & Struggles the international leadership consulting business, which bought the firm Redelinghuys & Partners of which he was the founder. He has been deeply involved in career management and executive search all his life. He is the chairman of the South African company and now heads up its board practice working with chairmen and CEOs focussed on CEO succession, strategic leadership review and board evaluation.